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Samsung to cut investment in DRAM production next year due to price volatility
28.12.2021 [10:22],
Nikolay Khizhnyak

Samsung Electronics plans to cut investments in its DRAM lines next year, according to South Korean newspaper Chosun Biz. The company will produce only 30 thousand semiconductor wafers for the production of chips per month. With reference to industrial sources, the publication reports that the company made such a decision at the last meeting on global strategic development.

Samsung is said to be converting several of its thirteen operational DRAM production lines for image sensors by next March. Initially, the company planned to increase investments in memory production to the volume of 40 thousand semiconductor wafers per month, but in fact it will reduce by 10 thousand per month.

It is indicated that one of the reasons for such a move on the part of the South Korean tech giant was the uncertainty in the pricing of the DRAM memory market. If in the first half of 2021 prices for 8 GB DDR4 chips increased by 17% amid the protracted coronavirus pandemic, by November they had decreased by 14.4%.

At the same time, it is indicated that Samsung will soon have to pay dividends to its shareholders. Analysts note that lower memory production costs will lead to shortages and higher prices, which in turn will allow Samsung to increase its profits. The market responds very quickly to such incidents. You don’t need to look far for an example. Even a short-term disruption at Micron, the third largest memory manufacturer in the market after Samsung and SK Hynix, pushed Micron’s stock up 2% on a more optimistic revenue outlook.

SK Hynix will also not be able to compensate for the lack of memory chips on the market in the near future. She recently bought Intel’s NAND memory chip production, so she has no extra funds to invest in DRAM production. By the end of next year, the company needs to pay Intel $ 7 billion out of 9 under this deal.